Murray and Roberts Construction (Pty) Ltd t/a Murray and Roberts Plant v Commission For Conciliation, Mediation and Arbitration and Others (JR 1159/12) [2014] ZALCJHB 251 (15 July 2014)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: JR1159/12

In the matter between:

MURRAY AND ROBERTS CONSTRUCTION (PTY) LTD

t/a MURRAY AND ROBERTS PLANT..................................................................................Applicant

and

COMMISSION FOR CONCILIATION

MEDIATION AND ARBITRATION..........................................................................First Respondent

THEMBA HLATSWAYO N.O................................................................................Second Respondent

GEORGE VELILE MDUSHE..................................................................................Third Respondent

Heard: 4 July 2013

Delivered: 15 July 2014

Summary: Review of the decision of an arbitrator under section 145 of the LRA –– Review of the decision of an arbitrator under section 145 of the LRA –– gross irregularity – whether there was any reasonable basis for the arbitrator’s finding on the evidence

FOURIE, AJ

[1] Mr George Velile Mdushe was dismissed by Murray & Roberts Construction (Pty) Ltd for misconduct. Mr Mdushe referred an unfair dismissal dispute to the CCMA. The arbitrator, Mr Themba Hltatswayo, held that the dismissal was substantively unfair. This is an application to review and set aside the arbitration award in terms of section 145 of the Labour Relations Act 66 of 1995.

[2] Mr Mdushe’s dismissal arose out of the unauthorised removal of steel plates from the employer’s site. Mr Mdushe was implicated in the incident by a security guard, Mr Fishberto Mandlhazi. The arbitrator’s assessment of the credibility and reliability of the evidence of Mr Mandlhazi is at the heart of the application for review.

The background to the dismissal

[3] Mr Mdushe worked at a Murray & Roberts construction site in Westonaria. Mr Mandlhazi was employed by MC Security as a security guard at the same site.

[4] On 8 December 2011 the company discovered that steel plates were missing from the site and instructed the company’s equipment yard manager, Mr Robert Toop, to conduct an investigation. Mr Toop requested the security company to interview all security personnel about the missing plates. The security company informed Mr Toop later that day that a guard had seen plates being removed.

[5] The guard, Mr Mandhlazi, provided the employer with a statement on 14 December 2011. It was written on his behalf and signed by him. This evidence implicated Mr Mdushe and another employee, Mr Seleke. They denied any involvement.

[6] In the course of the investigation of the incident, both Mr Mandlhazi and Mr Mdushe were asked to perform a polygraph test. Mr Mandhlazi agreed, and the test showed no sign of deception. Mr Mdushe and his co-accused refused to submit themselves to the polygraph test. Disciplinary proceedings were instituted against both employees and were conducted separately. Only the case against Mr Mdushe is at issue in this application.

[7] Mr Mdushe was charged with misappropriation of company property and with gross insubordination for refusing to conduct a polygraph test. A disciplinary enquiry was held and Mr Mdushe was found guilty of both charges. He was dismissed. He referred an unfair dismissal dispute to the CCMA. The matter was referred to arbitration after an unsuccesful attempt at conciliation.

The evidence presented at arbitration

The eyewitness account

[8] At the arbitration, Mr Mandlhazi gave evidence for the company. As Mr Mandlhazi is not conversant in English, he gave evidence through an interpreter, as was the case with his signed statement and the oral evidence he presented at the disciplinary enquiry.

[9] Mr Mandlhazi recalled that on the morning in question, at about 9 am, a Hyundai bakkie arrived outside the gate where he was stationed. Mr Mandlhazi did not know the two occupants of the bakkie. Mr Mandlhazi presented the driver of the bakkie with an attendance book to sign. They said that Mr Mdushe knew that they were there to collect steel plates. Mr Mdushe came running from the workshop and told Mr Mandlhazi that the driver did not have to sign as they were from the company and were simply moving the plates to another site. Mr Mandlhazi allowed them to enter the site. Mr Mandlhazi said that he would need a delivery note to show where they were taking the plates. Mr Mdushe said that he would complete the paperwork and give it to him later. Mr Mdushe, together with Mr Seleke and the occupants of the bakkie, loaded the steel plates onto the bakkie. The bakkie removed the plates from the site. The transfer

note was never produced.

[10] Mr Mandlhazi had no independent recollection of the date on which the incident occurred. He described the day as a Sunday, sometime during the previous year, prior to the shutdown period in December.

[11] Mr Mandlhazi accepted that he had not followed normal procedure by allowing the bakkie access to the site and to remove the steel plates without the necessary paperwork. He claimed that this was because Mr Mdushe had told him that it was not necessary and because he felt intimidated by Mr Mdushe. Mr Mandlhazi’s evidence was that he told the security guard who relieved him at the end of his shift that the plates had been removed. He did not report the matter to his superiors. The fellow security guard to whom he mentioned the matter was due to give evidence at the arbitration but was shot and killed on the day of the arbitration before he could testify.

[12] Mr Mandlhazi gave evidence that he knew Mr Mdushe. He said that he had nothing against him and that there had been no animosity between them. He had in the past run errands for Mr Mdushe and other workers on site when they were on shift. He gave evidence that he had no reason falsely to incriminate Mr Mdushe.

The challenge to the eyewitness evidence

[13] It was put to Mr Mandlhazi under cross-examination that Mr Mdushe, was at home when the incident occurred. Mr Mandlhazi’s evidence that he felt intimidated by Mr Mdushe was challenged, as was his failure to report the incident.

[14] Under cross-examination, Mr Mandlhazi confirmed that he did not recall the date of the incident, but that it happened “towards the end” of the previous year. When challenged on whether it happened on Saturday or a Sunday, he said that it happened on a Saturday and emphasised that he recalled that it happened on a weekend, when they were not working.

[15] On the question of his relationship with Mr Mdushe, Mr Mandlhazi’s evidence was that he had on a previous occasion reported to his superior that Mr Mdushe had threatened him. The complaint had been recorded in the “OB book”, although the relevant pages of the book had later disappeared. He also confirmed in evidence that he had on a previous occasion borrowed money from Mr Mdushe in the course of running errands for him.

The evidence corroborating the eyewitness account

[16] The employer called Mr Toop to give evidence. He confirmed the disappearance of the steel plates from the site and gave evidence regarding his investigation of the incident. He gave evidence that the security company had established straightaway that one of the guards, Mr Mandlhazi, knew the circumstances under which the plates had been removed. When Mr Mandhlazi had been on duty one weekend, plates were loaded in a bakkie and moved to another site by a group of workers, including two employees who were known to him. Mr Mandlhazi identified the two employees in question as Mr Mdushe and Mr Seleke. Mr Mandlhazi had voluntarily presented this information to the company in response to Mr Toop’s inquiry. There had been no reason at the time to suspect that his evidence was unreliable. His recollection was detailed – too detailed according to Mr Toop to have been fabricated.

[17] Mr Toop’s recollection of what Mr Mandlhazi had told him at the time was consistent with the version presented by the security guard at the arbitration. Mr Toop’s recollection was that Mr Mandlhazi had told him that Mr Mdushe claimed that they could not provide the paperwork because the site was closed over the weekend, that he undertook to produce the paperwork after the weekend, but that this had not materialised. It was Mr Toop’s evidence that it would not have been abnormal for Mr Mdushe to inform the guard that he would provide the paperwork later. The absence of paperwork was not unusual – it happened that it was sometimes overlooked. Mr Toop explained that the record-keeping system was aimed mainly at preventing perpetrators from outside the company from removing property. Company employees would be afforded more trust.

[18] Mr Toop’s evidence was that it was only Mr Mdushe’s team of crane mechanics that would have had access to the plates. Mr Mdushe was often present on site on weekends. It appeared that both he and Mr Seleke stayed overnight in the yard when they were on duty, as they lived far away. They only went home on weekends when they were not working.

[19] Mr Toop also gave evidence, in response to questioning by the arbitrator, that the security company had informed him some time prior to the incident of frequent threats made against Mr Mandlhazi in the course of his performance of his duties. He explained that there had been conflict between the employees and the security guards since the company introduced security measures during the day shift. Prior to this, the employees did not have to account for the flow of material in and out of the yard. Introducing the

record-keeping system caused some resentment.

[20] Mr Toop gave evidence that he asked Mr Mandlhazi to submit himself to a polygraph test so that he could rule out any doubt, as it was simply “one man’s word against the other man’s word”. He considered Mr Mandlhazi’s immediate willingness to conduct the polygraph test to be consistent with his impression that the guard had been telling the truth. The results of Mr Mandlhazi’s polygraph testing supported his eyewitness evidence.

[21] On confronting Mr Mdushe with the allegations against him, Mr Mdushe did not deny his involvement, but asked Mr Toop “what’s your proof?” When requested to conduct the polygraph test Mr Mdushe immediately refused.

[22] The employer also called as witness Mr Bruce Beaumont, who had chaired the disciplinary enquiry. He gave evidence that he was influenced in his decision to dismiss Mr Mdushe by the fact that Mr Mandlhazi had agreed to take a polygraph test, which he had passed. Mr Mdushe, on the other hand, had refused to take a polygraph test.

Mr Mdushe’s evidence

[23] Mr Mdushe denied that he had any involvement in the incident. He said that he and his team had been working on the first three weekends of the month. He did not work the last weekend, and went home. When he was working, someone in the team would have seen the incident. He would not have removed anything from site without paperwork. He suggested in evidence that the theft could have been an inside job conducted by the security officers themselves.

[24] Mr Mdushe gave evidence that he had refused to do the polygraph only because the person who had conducted the testing never explained the process to him.

The arbitrator’s award

[25] The arbitrator recorded the parties’ testimony, followed by an analysis of the evidence. He did not make explicit credibility findings, but expressed some doubts about aspects of both parties’ versions.

[26] He held that Mr Mandlhazi’s failure to report the incident was “inextricably linked” to his credibility as witness. He also held that Mr Mandlhazi had initially said that the incident had taken place “at the end of December 2011”, but later admitted that he could not recall whether it happened instead in November 2011.

[27] The arbitrator found that Mr Mandlhazi had given a “detailed account” to Mr Toop at the time and that Mr Toop had considered that account to be credible. The arbitrator, however, weighed against this that this “detailed account” was nevertheless not entered into the OB book. He observed that Mr Mandlhazi admitted that he could not read, which made him doubt whether he could record events in the OB book at all.

[28] The arbitrator rejected Mr Mandlhazi’s evidence that Mr Mdushe had intimidated him. He held that this was, on balance, unlikely considering their “fairly close relationship”. This close relationship, he held, was evidenced by, amongst other things, the fact that they “shared a living space” and that Mr Mandlhazi borrowed money from Mr Mdushe.

[29] In relation to Mr Mdushe’s evidence, he found that Mr Mdushe did not deny the event, as he had not been given a specific date on which the incident had occurred. Despite holding that Mr Mdushe’s unwillingness to subject himself to a polygraph test cast doubt over his evidence; the arbitrator held that this nevertheless did not establish the probability that Mr Mdushe had removed the steel plates.

[30] The arbitrator found that, on a balance of probabilities, Mr Mdushe had been dismissed to cover for the failure of Mr Mandlhazi to act with due diligence to monitor the movement of the material at the yard. He accordingly found that the dismissal was substantively unfair.

The challenge to the award

[31] The award is challenged both on the basis that the arbitrator exceeded his powers and that he committed a gross irregularity in the conduct of the proceedings. It appears to me that the arbitrator did commit a gross irregularity in the arbitration in the sense contemplated by the SCA in Herholdt v Nedbank Ltd.[1] The Court described this ground of review as follows:

“For a defect in the conduct of the proceedings to amount to a gross irregularity as contemplated by section 145(2)(a)(ii), the arbitrator must have misconceived the nature of the inquiry or arrived at an unreasonable result. A result will only be unreasonable if it is one that a reasonable arbitrator could not reach on all the material that was before the arbitration. Material errors of fact, as well as the weight and relevance to be attached to particular facts, are not in and of themselves sufficient for an award to be set aside, but are only of any consequence if their effect is to render the outcome unreasonable.”[2]

[32] I did not understand the applicant’s case to be that the arbitrator misconceived the nature of the enquiry. The applicant, instead, urged a finding that the arbitrator made a number of reviewable errors in his award, including the weight that he afforded to the evidence and the conclusions that he drew from it.

[33] I agree with the applicant that the arbitrator made a number of errors in his approach to the evidence. For example, the arbitrator was wrong in holding that Mr Mandlhazi had given evidence that the incident took place “at the end of December 2011” and that he had changed this evidence later. The record shows that his earlier evidence was in fact that the incident happened “before the shutdown”. In fact, it seems clear that Mr Mandlhazi never contended for a particular date on which the

incident took place. It is also correct that the arbitrator made an error when he held that that Mr Mandlhazi and Mr Mdushe shared living quarters. The evidence established instead that Mr Mdushe stayed over in the yard on weekdays and on weekends when he was on duty and that Mr Mandlhazi was stationed in that yard. The arbitrator also, in my view, misconstrued the import of the evidence that Mr Mandlhazi would on occasion run errands for the employees who worked in the yard, including Mr Mdushe. Mr Mandlhazi’s willingness to run errands for the workers is not inconsistent with him feeling intimidated by them. The conclusion that he had not been intimidated was in any event contradicted by the unchallenged evidence of Mr Toop that Mr Mandlhazi had laid an earlier complaint of intimidation. The applicant says that the arbitrator was wrong in holding that Mr Mandlhazi had not recorded the removal of the steel plates in the OB book. In my view, the arbitrator was right in this respect. It seems to me that the evidence of the OB book entry relates instead to the previous intimidation incident. What does, however, seem erroneous in the arbitrator’s finding on this score is that it is contradicted by his finding that Mr Mandlhazi could not read. The arbitrator failed to factor this into his evaluation of Mr Mandlhazi’s evidence on this score.

[34] It seems, however, that the proper approach in line with Herholdt is not to consider the record and to ask what would have been the right, or even reasonable, conclusions to make based on the evidence

and to compare that to what the arbitrator held. Instead, the starting point should be the finding made by the arbitrator and the

enquiry, whether a reasonable basis for the finding can be found in the evidence.

No reasonable basis for the finding

[35] The arbitrator held that on a balance of probabilities Mr Mandlhazi had implicated Mr Mdushe in order to cover up his own failure to prevent the loss of the steel plates. Can any reasonable basis be found for this finding on the evidence?

[36] In enquiring after a reasonable basis for the arbitrator’s finding, the question is accordingly whether there is evidence that could reasonable support a conclusion that it was probable that Mr Mandlhazi covered up his own failure to safeguard the steel plates by implicating Mr Mdushe. In my view, there was not.

[37] In the first instance, there was no evidence presented in support of this finding. It was not even Mr Mdushe’s case that he had been implicated to cover up Mr Mandlhazi’s lack of diligence. Mr Mdushe’s case was that, if the incident had happened as Mr Mandlhazi said it did, Mr Mandlhazi would have reported it. In other words, he attacked the credibility and reliability of Mr Mandlhazi’s version because there was no record to support it. The arbitrator went much further in his finding, and without any basis to do so. There was no evidence that either the handling of the incident or the failure to keep proper records would have resulted in any sanction being visited upon Mr Mandlhazi or the security company. There was no evidence that Mr Mandlhazi or the security company was blamed for their handling of the incident or for their failure to keep proper records. In short, there was no evidence that there was any need for a “cover-up”.

[38] Furthermore, the evidence of the corroborating witnesses did not support the arbitrator’s finding of a cover-up. Mr Toop acknowledged that the security measures were focused mainly on preventing outsiders from removing company property; company employees would be given more leeway regarding compliance with the procedures. His evidence that it was not unusual for record-keeping requirements to be overlooked was unchallenged. It therefore seems inconsistent with this evidence that Mr Mandlhazi would have felt the need to “cover up” the fact that he had overlooked those requirements.

[39] Even if one accepts the arbitrator’s criticism that the date evidence was inconsistent at times, it was never suggested that the employer, at the time of the investigation, knew when the property had disappeared. Indeed, on anybody’s version, there was never certainty about the date of the incident. This too militates against the suggestion of a cover-up. If the date had not been known, it would similarly not have been known who had been on duty at that time. There was accordingly little risk that Mr

Mandlhazi, or any other guard, could be blamed because the incident happened on their watch. It seems inherently improbable, in the absence of evidence to the contrary, that Mr Mandlhazi would have come forward and falsely incriminated someone else to avoid blame.

[40] The arbitrator rejected the evidence of Mr Mandlhazi that Mr Mdushe had intimidated him. He did so on the basis that they shared living quarters and that Mr Mandlhazi had borrowed money from Mr Mdushe. I agree with the applicant that he was wrong on these facts and that he misconstrued the import of the evidence. More significant for present purposes, however, is that even if correct,

this evidence could not provide a reasonable basis for his finding. The evidence of intimidation was presented in mitigation of Mr Mandlhazi’s failure to report the incident. Regardless of whether Mr Mandlhazi felt intimidated, the evidence of their

relationship does not support the arbitrator’s ultimate finding. If Mr Mandlhazi was not intimidated and if it were true, as the arbitrator held, that they had a close relationship, it is even less probable that Mr Mandlhazi would have falsely incriminated Mr Mdushe.

[41] The suggestion that he had covered his own ineptitude by implicating Mr Mdushe was not put to Mr Mandlhazi in cross-examination. This is not surprising, as it was not Mr Mdushe’s case. The fact is that Mr Mandlhazei accordingly was never given an opportunity to defend himself against this attack. Not only was there accordingly no evidentiary support for the proposition, but the finding clearly had an unreasonable result also for this reason.

[42] I accordingly uphold the applicant’s challenge that the decision was grossly irregular. The award is reviewable in that the evidence establishes no reasonable basis for his finding on the probabilities. The applicant is accordingly entitled to the relief it seeks.

Substituting the decision of the arbitrator

[43] This is an appropriate case in which to substitute the decision of the arbitrator. The record is detailed. The parties do not contend that there were procedural irregularities that tainted the arbitration. Counsel addressed this Court in argument on where the balance of probabilities lies on the evidence. There appears to me no reason for further time and money to be spent on referring the matter back to arbitration when the matter has been fully ventilated before this Court.

[44] Only Mr Mandlhazi presented a version of events. Mr Mdushe did not pursue his own competing version. Instead, Mr Mdushe focused on challenging the veracity of Mr Mandlhazi’s evidence. In addition to claiming that he was not there at the time, he also challenged the evidence of Mr Mandlhazi on the basis that he was vague about the date. He contended that Mr Mandhlazi’s evidence that he felt intimidated could not be believed. In the nature of the evidence, not much remained of his alibi defence, as the employer could not accurately pin a date to the incident.

[45] In his evidence-in-chief (and without having put this to Mr Mandlhazi) Mr Mdushe also introduced a late-blooming defence that the incident must have been an “inside job” by the security guards, but not much was ultimately made of this.

[46] This case is accordingly not one in which one has to assess mutually contradictory versions of events. Instead, the question is whether the employer had discharged its onus in the face of Mr Mdushe’s denial. This involves assessing Mr Mandlhazi’s credibility, the reliability of his evidence (including to what extent it could be corroborated by the other witnesses) and the inherent probabilities of his version. Van der Merwe, in Schwikkard and Van der Merwe[3] comments that:

‘“In civil cases the burden of proof is discharged as a matter of probability. The standard is often expressed as requiring proof on a ‘balance of probabilities’ but that should not be understood as requiring that the probabilities should not more than favour one party in preference to the other. What is required is that the probabilities in the case be such that, on a preponderance, it is probable that the particular state of affairs existed.”’

[47] In my view, the employer had established that it was probable that Mr Mdushe was involved in the unlawful removal of the company property.

[48] The unchallenged evidence was that Mr Mdushe and his team were the only employees who would have had access to the steel plates. It was their job to load the plates.

[49] The evidence also placed Mr Mdushe on site on weekends. Despite some minor inconsistencies about the precise date, the evidence established clearly that the incident occurred on a weekend. While the absence of the date frustrated Mr Mdushe’s attempt at an alibi defence, it does not, in my mind, affect the reliability or credibility of Mr Mandlhazi’s evidence.

[50] The absence of a written record to substantiate his version of events seems to me explained by Mr Mandlhazi’s recollection of events. It is also consistent with evidence of Mr Mandlhazi’s inability to read, and supported by the corroborating evidence of Mr Toop regarding the unreliability of the reporting system generally. The evidence was not that Mr Mandlhazi had hidden the incident. Indeed, he said that he had mentioned it to the security guard who had taken over from him. This had been his evidence from the outset. The untimely death of that guard deprived the arbitration of his corroborating evidence. But the evidence cannot be disregarded for that reason alone. Indeed, in my view of the probabilities, it would have been surprising if Mr Mandlhazi had reported the matter in any more formal sense, considering that at the time, he would have thought the transgression (such as it was) only to involve moving the steel plates to another company site without the proper paperwork. Mr Toop’s evidence was that it was not unusual for paperwork to be overlooked and that company employees were trusted to comply after the fact. It was only when the steel plates were reported missing that it became clear that the incident had been more serious. At that point, Mr Mandlhazi immediately came forward.

[51] The evidence regarding the polygraph test is, in my view, corroborating, if peripheral. Leaving aside Mr Mdushe’s unwillingness to submit himself to the test and the implications of his refusal, Mr Mandlhazi’s unflinching willingness weighs favourably in assessing his credibility.

[52] Also tangential is the issue of the relationship between Mr Mandlhazi and Mr Mdushe. Mr Stoop’s evidence as to the dynamic between the security guards and the workers was unchallenged. His evidence confirmed Mr Mandlhazi’s evidence that he had previously reported incidents of intimidation. In my mind, this is not inconsistent with his statement that he tried to remain friendly with the workers who lived on site or with his willingness to run errands for them. But nothing much turns on it, in my view.

[53] I accordingly find that Mr Mandlhazi’s evidence of the incident is probable and supported by the corroborating evidence. In the circumstances, his dismissal on the ground of misappropriation of company property was fair.

[54] I am grateful to the parties for their submissions and for Advocate Pillay who assisted Mr Mdushe on pro bono basis.

[55] In the circumstances, the following order is made:

(a) The application for review is granted, with no order as to costs.

(b) The second respondent’s award is set aside, and replaced by the following:

“1. The dismissal of the applicant by the respondent was substantively fair.

2. No order is made as to costs.”

___________________

Fourie, AJ

Acting Judge of the Labour Court

APPEARANCES:

For the Applicant: Advocate L Charoux

Instructed by: Stanley Moldt Attorneys

For the Third Respondent: Advocate L Pillay

Instructed by: Truter, Crous, Wiggill

[1] 2013 (6) SA 224 (SCA)

[2] Ibid at para 25

[3] Principles of Evidence, 3rd Edition, Juta and Company Ltd, 2009, at 327.